World Liberty Financial (WLFI) recently learned a valuable lesson: that blockchain’s promised “transparency” can sometimes reveal things that certain people would prefer to keep hidden.
This week, a big controversy erupted over a key governance vote in their system. Pseudonymous researcher DeFi^2 caught the voting pattern, showing that the largest single wallet had 18.786% of the total voting power. Nine wallets connected to the project team (or close partners) cast votes that made up nearly 60% of the total voting power. They pushed through a proposal even though many regular token holders could not participate because their tokens are locked up (about 80% of tokens are reportedly still locked and non-voting).
What was the vote about? The proposal was to use up to 5% of the project’s unlocked treasury funds—worth roughly $120 million—to help grow and promote their USD1 stablecoin. This includes things like incentives, partnerships, and programs to make USD1 more widely used in both centralized finance (CeFi) and decentralized finance (DeFi) platforms, helping it compete better against big stablecoins like USDT or USDC.
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The vote passed with strong overall approval (around 77-78% in favor), but critics are calling foul because a tiny group of insider-linked wallets basically decided the outcome. Thousands of everyday investors with locked tokens had no say.
Power Concentrated Among Few Addresses
The voting setup raises obvious questions about what “decentralized governance” means when nine wallets call the shots. Team-linked addresses and strategic partners made the decisive moves during a 72-hour voting window, introducing measures that critics say help the protocol at investors’ expense.
“This contrasts sharply with real voters who’ve been locked out of accessing their WLFI tokens since launch,” DeFi^2 pointed out. These investors cannot vote on unlocking their holdings until the team says so.
Revenue Flows Bypass Token Holders
Voting rights are not the only grey area of the project. As per WLFI’s documentation, token holders get no protocol revenue. Instead, 75% of net income flows to Trump family-linked entities. The remaining 25% goes to Witkoff family-associated groups.
One voter who opposed the measure said WLFI keeps watering down investor stakes without giving anything back. “They could liquidate alternative assets to fund USD1 incentives instead of further diluting us,” the holder complained after the vote wrapped up.
The timing matters. WLFI filed for a national trust banking charter earlier this month, angling for regulatory approval to handle USD1 issuance, custody, and conversion in-house. Last week the firm rolled out World Liberty Markets, an on-chain lending platform built around USD1 and the WLFI governance token.
The whole mess underscores a question that the crypto world still can’t answer: Can these projects actually deliver on decentralization, or is concentrated control the way the game gets played?
